Mercury Communications

Mercury Communications Ltd. was a national telephone company in the United Kingdom, formed in 1981 as a subsidiary of Cable & Wireless, to challenge the then-monopoly of British Telecom (BT). Although it proved only moderately successful at challenging BT's dominance, it led the way for new communication companies to attempt the same.

In 1997, Mercury ceased to exist as a brand after its amalgamation into the operations of Cable & Wireless.

The history of telecommunications in the United Kingdom starts in 1879, with the establishment of its first telephone exchange in London by The Telephone Company (Bells Patents) Ltd. On 10 March 1881, National Telephone Company (NTC) was formed, which later brought together smaller local telephone companies. In 1898, to break the near-monopoly held by NTC, the Postmaster General's office, which was in charge of licensing new telephone companies, issued thirteen new licences. But by 1911, five of the remaining six competitors had been taken over by either the General Post Office (GPO) or NTC. Under the Telephone Transfer Act 1911, NTC was taken over by the GPO in 1912, and created a state-run monopoly that would run nearly all telecommunication assets in the UK for the next seventy years.

During the 1920s, there was increasing competition from companies using radio communications such as Marconi's Wireless Telegraph Company. In 1928, it was decided that all telecommunication assets outside the UK, and within the British Empire, particularly the telegraph companies, should be merged into one operating company. The merged entity was initially known as the Imperial and International Communications company, and from 1934 as Cable & Wireless.

Following the Labour Party's victory in the 1945 general election, the government announced its intention to nationalise Cable and Wireless, which was carried out in 1947. The company remained government-owned, continuing to own assets and operating telecommunication services outside the UK. All assets in the UK were integrated with those of the General Post Office, which operated the UK's domestic telecommunications monopoly.

In October 1969, the Post Office (a public corporation) replaced the General Post Office (a government department). In October 1981, the Post Office was split into two separate public corporations, the Post Office and British Telecommunications. In 1981, the Thatcher government started the process of privatising nearly all state-run monopolies, including British Telecommunications, British Airways, British Steel Corporation and British Aerospace. The act also started the privatisation of Cable & Wireless, whose primary business was then in Hong Kong.

In 1981, Mercury Communications Ltd – a consortium of Cable & Wireless, Barclays, and BP – was founded as an experiment in telecommunications competition, primarily to compete with British Telecom. Its first chairperson was Sir Michael Edwardes, known for his success in turning around British Leyland. Mercury Communications was first licensed in 1982, and became a full Public Telecommunications Operator in 1984. The same year, Cable & Wireless bought out the stakes of its partners.

In 1989, Mercury formed a consortium with Motorola and Shaye Communications to run Callpoint, a Telepoint-based nationwide mobile phone service. It could not successfully compete with cellular telephone technology and closed in June 1991.